Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Correction of error
- This topic has 6 replies, 3 voices, and was last updated 8 years ago by John Moffat.
- AuthorPosts
- August 30, 2016 at 5:52 am #336143
Dear lecturer !
Could you please tell me the mistake made in this error ?
The petty cash book balance $500 had been omitted from the trial balance .
What is the journal entry to correct this error ?
August 30, 2016 at 7:43 am #336172The trial balance will not balance unless all of the balances are listed.
Strictly there is no double entry required (because the balance will be in the accounts correctly – it just wasn’t listed).
However because the trial balance did not balance a suspense account will have been created for the difference, and therefore you credit the suspense account.
August 30, 2016 at 2:13 pm #336260Therefore, the journal entry to correct this error is
Dr petty cash account
Cr suspense account ?August 30, 2016 at 3:33 pm #336295If that was the only choice available, then yes.
However we would not actually put a debit on the petty cash account because the balance is already on the account (it was just that it wasn’t listed on the trial balance) and so we don’t want to change the balance itself.
August 30, 2016 at 5:47 pm #336347Ok ! Lecturer
Thank you very much !
August 30, 2016 at 8:41 pm #336382i want help in understanding the suspense account
August 31, 2016 at 6:31 am #336453manirak: you are welcome 🙂
pailklaus7: you should watch my free lectures on suspense accounts. (The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well)
- AuthorPosts
- You must be logged in to reply to this topic.